House prices set for steady rise

Homeowners can look forward to a year of steady, if unspectacular, house-price rises after the property market ended 2000 on a stable footing, according to a report just published.

A poll of more than 250 surveyors conducted by the Royal Institution of Chartered Surveyors found that a net 21% reported that house prices rose in the three months to December, down slightly from 23% in the three months to November.

The biggest regional fall was seen in London, where the balance plunged from 37% to 24%. For Britain as a whole, a net 25% of surveyors thought prices would continue to rise over the next three months, although at a 'very gentle pace'.

Ian Perry, RICS national housing spokesman, said: 'Last year RICS predicted the housing market would head for a period of stability towards the end of the year, continuing into the early part of 2001, and the prediction looks set to be confirmed. Stability in the market is good news for first-time buyers in particular, who may have been put off by the volatile market last year.'

After surging to a 10-year high of 16% at the start of 2000, house-price inflation slowed sharply over the summer as the impact of past interest-rate rises, as well as an increase in stamp duty, sent the market off the boil.

Latest evidence from mortgage lenders has been mixed. While Nationwide said that prices had risen by 1.2% during December, Halifax reported a 1.1% slump, the steepest fall in a single month for more than six years. Both, however, expect house-price inflation to run between 4% and 7% this year. Nationwide publishes its January report on Thursday.

The RICS survey revealed a 13% increase in the number of houses remaining on surveyors' books compared with a year ago. The increase was attributed to the failure of some sellers to lower their price expectations, making their properties difficult to sell.

Meanwhile, the miserable Christmas suffered by retailers was reflected in figures from the Bank of England showing that consumer credit slipped to £1.1bn in December from £1.2bn in November.

Sterling was up slightly at $1.4595 as foreign exchanges hovered in limbo ahead of the US Federal Reserve's decision on interest rates tomorrow.

Economists are virtually unanimous in expecting the Fed to slash rates by another half-point to 5.5% in an attempt to kick-start the flagging American economy.

The euro remained in the doldrums, slightly softer at 91.65 cents against the dollar and 62.8p against sterling.